Nifty 50: Tech View: Nifty 50 Forms ‘Inverted Hammer’, Recovery Possible

New Delhi: nifty 50 An ‘inverted hammer’ candle formed on the daily chart on Tuesday, forming around the bottoms at times, as traders remain skeptical about early pullback attempts, analysts said. Analysts said the 15,600-700 level remains a strong support for the index to move further. They are seeing resistance at 16,850 level.

Ruchi Jain, Lead Research at
5paisa.com Said momentum readings on the lower time chart have entered oversold territory.

Usually the index witnesses a pullback move or consolidation for 1-2 sessions in such oversold set-ups, before resuming momentum in the direction of the trend.

“Tuesday’s move has formed an ‘inverted hammer’ candlestick pattern near the previous swing low support. This pattern, with an oversold setup, could lead to a pullback move in one to two sessions,” Jain said.

“However, confirmation of such a pullback would only be seen at a crossover above the candle high of 15,858. In such a case, the pullback could move towards retracement resistance and the recent gap area of ​​15,925 and 16,100.”

Milan Vaishnav, Founder and Technical Analyst, Gemstone Equity Research, said there could be a short-term technical loophole as there has been heavy selling in both Indian and global markets over the past three days.

He said that while the Nifty 50 has broken close to 800 points, the US index Nasdaq has tested its 200-week moving average. He further added that both the S&P 500 and the Dow show strong RSI divergence against price.

Vaishnav said, “Topping of Nifty50 above 15,670-15,700 will be extremely important. Traders should not disregard a broader picture where Nifty 50 is hanging precariously at support levels while price action has taken a bearish descent. The triangle has formed.”

The index for the day ended 42.30 points or 0.27 per cent lower at 15,732.10.

Mazhar Mohamed of chartviewindia.in said if the index sustains above the level of 15,650, some short-covering led rally in Wednesday’s session could be a possibility.

The market is placed in an important support zone around 15,700-15,600 levels, Nagraj Shetty said, technical research analyst, HDFC Securities,

Shetty anticipating immediate resistance at the 15,850 level, saying that the inability of the bulls to show any significant reversal from the crucial support level, another leg down at the 15,600-15,500 level before showing any upside bounce from the lows will come.

nifty Bank


Sandalwood

of Motilal Oswal Securities Said Bank Nifty opened negative but managed to honor many of its supports near 33,000-33,100 zones and bounced towards 33,600 levels.

“It later failed to hold its high zones and moved towards 33,200,” he said.

“The index has formed a short bodied bullish candle on the daily scale and is forming lower levels for the past 10 sessions. As long as it stays below 33,750, further weakness can be seen towards 33,000 and 32,500, while The barrier has been placed at 33,750 and 34,000 zones,” Taparia said.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)